Exhibit 10.34


 


OMNIVISION TECHNOLOGIES, INC.


 


2009 EMPLOYEE STOCK PURCHASE PLAN


 


1.             Purpose.  The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an opportunity to
purchase Common Stock through accumulated payroll deductions.  This Plan includes two components: a Code Section 423
Plan Component and a Non-423 Plan Component. 
The Company’s intention is to have the Code Section 423 Plan
Component qualify as an “employee stock purchase plan” under Section 423
of the Code, (although the Company makes no undertaking or representation to
maintain such qualification).  The
provisions of the Code Section 423 Plan Component, accordingly, will be
construed so as to extend and limit participation in a uniform and nondiscriminatory
basis consistent with the requirements of Section 423 of the Code.  In addition, this Plan authorizes the grant
of options under the Non-423 Plan Component that do not qualify under Section 423
of the Code, pursuant to rules, procedures or sub-plans adopted by the
Administrator that are designed to achieve tax, securities laws or other
objectives for Eligible Employees and/or the Company.  Except as otherwise indicated, the Non-423
Plan Component will operate and be administered in the same manner as the Code Section 423
Plan Component.


 


2.             Definitions.


 


(a)           “Administrator” means the
Board or any Committee designated by the Board to administer the Plan pursuant
to Section 14.


 


(b)           “Applicable Laws” means the
requirements relating to the administration of equity-based awards under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where
options are, or will be, granted under the Plan.


 


(c)           “Board” means the Board of
Directors of the Company.


 


(d)           “Change in Control” means the
occurrence of any of the following events:


 


(i)    Change in Ownership of the Company.  A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as
a group (“Person”), acquires ownership of the stock of the Company that,
together with the stock held by such Person, constitutes more than 50% of the
total voting power of the stock of the Company; or


 


(ii)   Change in Effective Control of the Company.  If the Company has a class of securities
registered pursuant to Section 12 of the Exchange Act, a change in the
effective control of the Company which occurs on the date that a majority of
members of the Board is replaced during any 12 month period by Directors whose
appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election.  For purposes of this clause (ii), if any
Person is considered to be in effective control of the Company, the acquisition
of additional control of the Company by the same Person will not be considered
a Change in Control; or


 

















 


(iii)  Change in Ownership of a Substantial
Portion of the Company’s Assets.  A
change in the ownership of a substantial portion of the Company’s assets which
occurs on the date that any Person acquires (or has acquired during the 12
month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to or more than 50% of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or acquisitions.  For purposes of this subsection (iii), gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.


 


For
purposes of this Section 2(d), persons will be considered to be acting as
a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business
transaction with the Company.


 


Notwithstanding
the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A,
as it has been and may be amended from time to time, and any proposed or final
Treasury Regulations and Internal Revenue Service guidance that has been
promulgated or may be promulgated thereunder from time to time.


 


Further
and for the avoidance of doubt, a transaction will not constitute a Change in
Control if: (i) its sole purpose is to change the state of the Company’s
incorporation, or (ii) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the persons who
held the Company’s securities immediately before such transaction.


 


(e)           “Code” means the Internal Revenue
Code of 1986, as amended.  Reference to a
specific section of the Code or Treasury Regulation thereunder will include
such section or regulation, any valid regulation or other official applicable
guidance promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such
section or regulation.


 


(f)            “Code Section 423 Plan
Component” means the component of this Plan that is intended to meet the
requirements set forth in Section 423(b) of the Code, as
amended.  The provisions of the Code Section 423
Plan Component shall be construed, administered and enforced in accordance with
Section 423(b).


 


(g)           “Committee” means a committee
of the Board appointed in accordance with Section 14 hereof.


 


(h)           “Common Stock” means the
common stock of the Company.


 


(i)            “Company” means Omnivision
Technologies, Inc., a Delaware corporation, or any successor thereto.


 


(j)            “Compensation” means all cash
compensation reportable on Form W-2, including without limitation base
straight time gross earnings, sales commissions, payments for overtime, shift
premiums, incentive compensation, incentive payments, bonuses and other
compensation, but does not include any non-cash compensation.


 


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(k)           “Designated Subsidiary” means
any Subsidiary that has been designated by the Administrator from time to time
in its sole discretion as eligible to participate in the Plan. The
Administrator will determine whether employees of any Designated Subsidiary
shall participate in the Code Section 423 Plan Component or the Non-423
Plan Component.


 


(l)            “Director” means a member of
the Board.


 


(m)          “Eligible Employee” means any
individual who is a common law employee of the Company or a Designated
Subsidiary and is customarily employed for at least twenty (20) hours per week
and more than five (5) months in any calendar year by the Employer,
other than an employee of a Designated Subsidiary under the Non-423 Plan
Component, who, as of the Enrollment Date, resides in a country that has been
excluded from participation in the Plan or who, as of the Enrollment Date, is
otherwise determined ineligible for participation in the Non-423 Plan
Component, at the discretion of the Administrator.  For purposes of the Plan, the employment
relationship will be treated as continuing intact while the individual is on
sick leave or other leave of absence that the Employer approves.  Where the period of leave exceeds three (3) months
and the individual’s right to reemployment is not guaranteed either by statute
or by contract, the employment relationship will be deemed to have terminated
three (3) months and one (1) day following the commencement of such
leave.  The Administrator, in its
discretion, from time to time may, prior to an Enrollment Date for all options
to be granted on such Enrollment Date, determine (on a uniform and
nondiscriminatory basis for employees who may participate in the Code Section 423
Plan Component) that the definition of Eligible Employee will or will not
include an individual if he or she: (i) has not completed at least two (2) years
of service since his or her last hire date (or such lesser period of time as
may be determined by the Administrator in its discretion), (ii) customarily
works not more than twenty (20) hours per week (or such lesser period of time
as may be determined by the Administrator in its discretion), (iii) customarily
works not more than five (5) months per calendar year (or such lesser
period of time as may be determined by the Administrator in its discretion), (iv) is
an executive, officer or other manager, or (v) is a highly compensated
employee under Section 414(q) of the Code.  Notwithstanding the foregoing, for options
granted under the Non-423 Plan Component, Eligible Employee shall also mean any
other employee of a Designated Subsidiary to the extent that local law requires
participation in the Plan to be extended to such employee, as determined by the
Administrator.


 


(n)           “Employer” means the employer
of the applicable Eligible Employee(s).


 


(o)           “Enrollment Date” means the
first Trading Day of each Offering Period.


 


(p)           “Exchange Act” means the
Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.


 


(q)           “Exercise Date” means the last
Trading Day of each Purchase Period.


 


(r)            “Fair Market Value” means, as
of any date and unless the Administrator determines otherwise, the value of
Common Stock determined as follows:


 


(i)    If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market of The Nasdaq Stock Market, its Fair Market Value


 


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will be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the date of determination (or on the last
preceding Trading Day if the date of determination is not a Trading Day), as
reported in The Wall Street Journal or such other
source as the Administrator deems reliable;


 


(ii)   If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value will be the mean between the high bid and low asked prices for the
Common Stock on the date of determination (or on the last preceding Trading Day
if the date of determination is not a Trading Day), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or


 


(iii)  In the absence of an established market for
the Common Stock, the Fair Market Value thereof will be determined in good
faith by the Administrator.


 


(s)           “Fiscal Year” means the fiscal
year of the Company.


 


(t)            “New Exercise Date” means a
new Exercise Date if the Administrator shortens any Offering Period then in
progress.


 


(u)           “Non-423 Plan Component” means
a component of this Plan that is not intended to meet the requirements set
forth in Section 423(b) of the Code, as amended.


 


(v)           “Offering Periods” means the
periods of approximately twenty-four (24) months during which an option granted
pursuant to the Plan may be exercised, commencing on the first Trading Day on
or after June 1 and December 1 of each year and terminating on the
last Trading Day in the periods ending twenty-four (24) months later.  The duration and timing of Offering Periods
may be changed pursuant to Sections 4 and 20.


 


(w)          “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code.


 


(x)            “Participant” means an
Eligible Employee that participates in the Plan.


 


(y)           “Plan” means this Omnivision
Technologies, Inc. 2009 Employee Stock Purchase Plan, which includes a
Code Section 423 Plan Component and a Non-423 Plan Component.


 


(z)            “Purchase Period” means the
approximately six (6) month period commencing after one Exercise Date and
ending with the next Exercise Date, except that the first Purchase Period of
any Offering Period will commence on the Enrollment Date and end with the next
Exercise Date.


 


(aa)         “Purchase Price” means an amount
equal to eighty-five percent (85%) of the Fair Market Value of a share of
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase
Price may be determined for subsequent Offering Periods by the Administrator
subject to compliance with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule) or
pursuant to Section 20.


 


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(bb)         “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.


 


(cc)         “Trading Day” means a day on
which the national stock exchange upon which the Common Stock is listed is open
for trading.


 


3.             Eligibility.


 


(a)           Offering Periods.  Any Eligible Employee on a given Enrollment
Date will be eligible to participate in the Plan, subject to the requirements
of Section 5.


 


(b)           Limitations.  Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Eligible Employee (or any
other person whose stock would be attributed to such Eligible Employee pursuant
to Section 424(d) of the Code) would own capital stock of the Company
or any Parent or Subsidiary of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Parent or Subsidiary of the Company, or (ii) to the extent that his or
her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company or any Parent or
Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand
dollars ($25,000) worth of stock (determined at the Fair Market Value of the
stock at the time such option is granted) for each calendar year in which such
option is outstanding at any time, as determined in accordance with Section 423
of the Code and the regulations thereunder.


 


4.             Offering Periods.  The Plan will be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after June 1 and December 1 each year, or on such
other date as the Administrator will determine. 
The Administrator will have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced prior to the
scheduled beginning of the first Offering Period to be affected thereafter.


 


5.             Participation.  An Eligible Employee may participate in the
Plan by (i) submitting to the Company’s stock administration office (or
its designee), on or before a date determined by the Administrator prior to an
applicable Enrollment Date, a properly completed subscription agreement authorizing
payroll deductions in the form provided by the Administrator for such purpose,
or (ii) following an electronic or other enrollment procedure determined
by the Administrator.


 


6.             Payroll Deductions.


 


(a)           At the time a Participant enrolls in
the Plan pursuant to Section 5, he or she will elect to have payroll
deductions made on each pay day during the Offering Period in an amount not
exceeding fifteen percent (15%)  of the
Compensation, which he or she receives on each pay day during the Offering
Period; provided, however, that should a pay day occur on an Exercise Date, a
Participant will have the payroll deductions made on such day applied to his or
her account under the subsequent Purchase Period or Offering Period.  A Participant’s subscription agreement will
remain in effect for successive Offering Periods unless terminated as provided
in Section 10 hereof.


 


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(b)           Payroll deductions for a Participant
will commence on the first pay day following the Enrollment Date and will end
on the last pay day prior to the Exercise Date of such Offering Period to which
such authorization is applicable, unless sooner terminated by the Participant
as provided in Section 10 hereof.


 


(c)           All payroll deductions made for a Participant
will be credited to his or her account under the Plan and will be withheld in
whole percentages only.  A Participant
may not make any additional payments into such account.


 


(d)           A Participant may discontinue his or
her participation in the Plan as provided in Section 10, or may increase
or decrease the rate of his or her payroll deductions during the Offering
Period by (i) properly completing and submitting to the Company’s stock
administration office (or its designee), on or before a date determined by the
Administrator prior to an applicable Exercise Date, a new subscription
agreement authorizing the change in payroll deduction rate in the form provided
by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator; provided, however, that a
Participant may only make one payroll deduction change during each  month of the Offering Period.  If a Participant has not followed such
procedures to change the rate of payroll deductions, the rate of his or her
payroll deductions will continue at the originally elected rate throughout the
Offering Period and future Offering Periods (unless terminated as provided in Section 10).  The Administrator may, in its sole
discretion, limit the nature and/or number of payroll deduction rate changes
that may be made by Participants during any Offering Period, and may establish
such other conditions or limitations as it deems appropriate for Plan
administration.  Any change in payroll
deduction rate made pursuant to this Section 6(d) will be effective
as of the first full payroll period following five (5) business days after
the date on which the change is made by the Participant (unless the
Administrator, in its sole discretion, elects to process a given change in
payroll deduction rate more quickly).


 


(e)           Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b),
a Participant’s payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period.  Subject
to Section 423(b)(8) of the Code and Section 3(b) hereof,
payroll deductions will recommence at the rate originally elected by the
Participant effective as of the beginning of the first Purchase Period
scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 10.


 


(f)            Notwithstanding any provisions to
the contrary in the Plan, the Administrator may allow Eligible Employees to
participate in the Plan via cash contributions instead of payroll deductions if
(i) payroll deductions are not permitted under applicable local law, and (ii) the
Eligible Employee is participating in the Non-423 Plan Component or the
Administrator determines that cash contributions are permissible under Section 423
of the Code.


 


(g)           At the time the option is exercised,
in whole or in part, or at the time some or all of the Common Stock issued
under the Plan is disposed of, the Participant must make adequate provision for
the Company’s or Employer’s federal, state, or any other tax liability payable
to any authority including taxes imposed by jurisdictions outside of the United
States, national insurance, social security or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock.  At any
time, the Company or the Employer may, but will not be obligated to, withhold
from the Participant’s compensation the amount necessary for


 


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the Company or the Employer
to meet applicable withholding obligations, including any withholding required
to make available to the Company or the Employer any tax deductions or benefits
attributable to sale or early disposition of Common Stock by the Eligible
Employee. In addition, the Company or the Employer may, but will not be
obligated to, withhold from the proceeds of the sale of Common Stock or any
other method of withholding the Company or the Employer deems appropriate.


 


7.             Grant of Option.  On the Enrollment Date of each Offering
Period, each Eligible Employee participating in such Offering Period will be
granted an option to purchase on each Exercise Date during such Offering Period
(at the applicable Purchase Price) up to a number of shares of Common Stock
determined by dividing such Eligible Employee’s payroll deductions accumulated
prior to such Exercise Date and retained in the Eligible Employee’s account as
of the Exercise Date by the applicable Purchase Price; provided that in no
event will an Eligible Employee be permitted to purchase during each Purchase
Period more than a number of shares determined by dividing $12,500 by the Fair
Market Value of a share of the Company’s Common Stock (subject to any
adjustment pursuant to Section 19) on the Enrollment Date, and provided
further that such purchase will be subject to the limitations set forth in
Sections 3(b) and 13.  The Eligible
Employee may accept the grant of such option with respect to an Offering Period
by electing to participate in the Plan in accordance with the requirements of Section 5.  The Administrator may, for future Offering
Periods, increase or decrease, in its absolute discretion, the maximum number
of shares of Common Stock that an Eligible Employee may purchase during each
Purchase Period of an Offering Period. 
Exercise of the option will occur as provided in Section 8, unless
the Participant has withdrawn pursuant to Section 10.  The option will expire on the last day of the
Offering Period.


 


8.             Exercise of Option.


 


(a)           Unless a Participant withdraws from
the Plan as provided in Section 10, his or her option for the purchase of
shares of Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to the option will be purchased
for such Participant at the applicable Purchase Price with the accumulated
payroll deductions from his or her account. 
No fractional shares of Common Stock will be purchased; any payroll
deductions accumulated in a Participant’s account, which are not sufficient to
purchase a full share will be retained in the Participant’s account for the
subsequent Purchase Period or Offering Period, subject to earlier withdrawal by
the Participant as provided in Section 10. 
Any other funds left over in a Participant’s account after the Exercise
Date will be returned to the Participant. 
During a Participant’s lifetime, a Participant’s option to purchase
shares hereunder is exercisable only by him or her.


 


(b)           If the Administrator determines that,
on a given Exercise Date, the number of shares of Common Stock with respect to
which options are to be exercised may exceed (i) the number of shares of
Common Stock that were available for sale under the Plan on the Enrollment Date
of the applicable Offering Period, or (ii) the number of shares of Common
Stock available for sale under the Plan on such Exercise Date, the
Administrator may in its sole discretion (x) provide that the Company will
make a pro rata allocation of the shares of Common Stock available for purchase
on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner
as will be practicable and as it will determine in its sole discretion to be
equitable among all Participants exercising options to purchase Common Stock on
such Exercise Date, and continue all Offering


 


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Periods then in effect or (y) provide
that the Company will make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as will be practicable and as it will determine in its sole discretion
to be equitable among all participants exercising options to purchase Common
Stock on such Exercise Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20.  The
Company may make a pro rata allocation of the shares available on the
Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares for issuance
under the Plan by the Company’s stockholders subsequent to such Enrollment
Date.


 


9.             Delivery.  As soon as reasonably practicable after each
Exercise Date on which a purchase of shares of Common Stock occurs, the Company
will arrange the delivery to each Participant the shares purchased upon
exercise of his or her option in a form determined by the Administrator (in its
sole discretion) and pursuant to rules established by the
Administrator.  The Company may permit or
require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize
electronic or automated methods of share transfer.  The Company may require that shares be
retained with such broker or agent for a designated period of time and/or may
establish other procedures to permit tracking of disqualifying dispositions of
such shares.  No Participant will have
any voting, dividend, or other stockholder rights with respect to shares of
Common Stock subject to any option granted under the Plan until such shares
have been purchased and delivered to the Participant as provided in this Section 9.


 


10.           Withdrawal.


 


(a)           A Participant may
withdraw all but not less than all the payroll deductions credited to his or
her account and not yet used to exercise his or her option under the Plan at
any time by (i) submitting to the Company’s stock administration office
(or its designee) a written notice of withdrawal in the form determined by the
Administrator for such purpose, or (ii) following an electronic or other
withdrawal procedure determined by the Administrator.  All of the Participant’s payroll deductions
credited to his or her account will be paid to such Participant promptly after
receipt of notice of withdrawal and such Participant’s option for the Offering
Period will be automatically terminated, and no further payroll deductions for
the purchase of shares will be made for such Offering Period.  If a Participant withdraws from an Offering
Period, payroll deductions will not resume at the beginning of the succeeding
Offering Period, unless the Participant re-enrolls in the Plan in accordance
with the provisions of Section 5.


 


(b)           A Participant’s withdrawal from an
Offering Period will not have any effect upon his or her eligibility to
participate in any similar plan that may hereafter be adopted by the Company or
in succeeding Offering Periods that commence after the termination of the
Offering Period from which the Participant withdraws.


 


11.           Termination of
Employment.  Upon a
Participant’s ceasing to be an Eligible Employee, for any reason, he or she
will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such Participant’s account during the Offering Period
but not yet used to purchase shares of Common Stock under the Plan will be
returned to such Participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15, and such Participant’s
option will be automatically terminated.


 


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12.           Interest.  No interest will accrue on the payroll
deductions of a participant in the Plan, except as may be required by
applicable law, as determined by the Company, for Participants in the Non-423
Plan Component (or the Code Section 423 Plan Component if permitted under
Code Section 423).


 


13.           Stock.


 


(a)           Subject to adjustment upon changes in
capitalization of the Company as provided in Section 19 hereof, the
maximum number of shares of Common Stock that will be made available for sale
under the Plan will be 2,500,000 shares of Common Stock.


 


(b)           Until the shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), a Participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to
vote or receive dividends or any other rights as a stockholder will exist with
respect to such shares.


 


(c)           Shares of Common Stock to be
delivered to a Participant under the Plan will be registered in the name of the
Participant or in the name of the Participant and his or her spouse.


 


14.           Administration.  The Plan will be administered by the Board or
a Committee appointed by the Board, which Committee will be constituted to
comply with Applicable Laws.  The
Administrator will have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination
made by the Administrator will, to the full extent permitted by law, be final
and binding upon all parties. 
Notwithstanding any provision to the contrary in this Plan, the
Administrator may adopt rules or procedures relating to the operation and
administration of the Non-423 Plan Component to accommodate the specific
requirements of local laws and procedures for jurisdictions outside of the
United States.  Without limiting the
generality of the foregoing, the Administrator is specifically authorized to
adopt rules and procedures regarding eligibility to participate, the
definition of Compensation, handling of payroll deductions, making of
contributions to the Plan (including, without limitation, in forms other than
payroll deductions), establishment of bank or trust accounts to hold payroll
deductions, payment of interest, conversion of local currency, obligations to
pay payroll tax, determination of beneficiary designation requirements,
withholding procedures and handling of stock certificates that vary with local
requirements.  Further, the Administrator
is authorized to adopt sub-plans applicable to particular Designated
Subsidiaries or locations under the Non-423 Plan Component.  The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section 13(a) hereof,
but unless otherwise superseded by the terms of such sub-plan, the provisions
of this Plan shall govern the operation of such sub-plan.


 


15.           Designation of
Beneficiary.


 


(a)           If permitted by the
Administrator, a Participant may file a designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the Participant’s
account under the Plan in the event of such Participant’s death subsequent to
an Exercise Date on which the option is exercised but prior to delivery to such
Participant of such shares and cash.  In
addition, if permitted by the Administrator, a Participant may file a
designation of a beneficiary who


 


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is
to receive any cash from the Participant’s account under the Plan in the event
of such Participant’s death prior to exercise of the option.  If a Participant is married and the
designated beneficiary is not the spouse, spousal consent will be required for
such designation to be effective.


 


(b)           Such designation of beneficiary may
be changed by the Participant at any time by notice in a form determined by the
Administrator.  In the event of the death
of a Participant and in the absence of a beneficiary validly designated under
the Plan who is living at the time of such Participant’s death, the Company
will deliver such shares and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.


 


(c)           All beneficiary designations will be
in such form and manner as the Administrator may designate from time to time.


 


16.           Transferability.  Neither payroll deductions credited to a
Participant’s account nor any rights with regard to the exercise of an option
or to receive shares of Common Stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 15 hereof)
by the Participant.  Any such attempt at
assignment, transfer, pledge or other disposition will be without effect,
except that the Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 10 hereof.


 


17.           Use of Funds.  The Company may use all payroll deductions
received or held by it under the Plan for any corporate purpose, and the
Company will not be obligated to segregate such payroll deductions  unless otherwise required under local law, as determined by the
Administrator (in which case, the affected options will be granted under the
Non-423 Plan Component, if necessary). 
Until shares of Common Stock are issued, Participants will only have the
rights of an unsecured creditor with respect to such shares.


 


18.           Reports.  Individual accounts will be maintained for
each Participant in the Plan.  Statements
of account will be given to participating Eligible Employees at least annually,
which statements will set forth the amounts of payroll deductions, the Purchase
Price, the number of shares of Common Stock purchased and the remaining cash
balance, if any.


 


19.                                 Adjustments, Dissolution,
Liquidation, Merger or Change in Control.


 


(a)           Adjustments.  In the event that any dividend or
other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or
other change in the corporate structure of the Company affecting the Common
Stock occurs, the Administrator, in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the
Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock that may be delivered under the Plan, the Purchase Price
per share and the number


 


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of shares of Common Stock
covered by each option under the Plan that has not yet been exercised, and the
numerical limits of Sections 7 and 13.


 


(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be
shortened by setting a New Exercise Date, and will terminate immediately prior
to the consummation of such proposed dissolution or liquidation, unless
provided otherwise by the Administrator. 
The New Exercise Date will be before the date of the Company’s proposed
dissolution or liquidation.  The
Administrator will notify each Participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the Participant’s
option has been changed to the New Exercise Date and that the Participant’s
option will be exercised automatically on the New Exercise Date, unless prior
to such date the Participant has withdrawn from the Offering Period as provided
in Section 10 hereof.


 


(c)           Merger or Change in Control.  In the event of a merger or Change in
Control, each outstanding option will be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.  In the event that
the successor corporation refuses to assume or substitute for the option, the
Offering Period with respect to which such option relates will be shortened by
setting a New Exercise Date on which such Offering Period shall end.  The New Exercise Date will occur before the
date of the Company’s proposed merger or Change in Control.  The Administrator will notify each
Participant in writing prior to the New Exercise Date, that the Exercise Date
for the Participant’s option has been changed to the New Exercise Date and that
the Participant’s option will be exercised automatically on the New Exercise
Date, unless prior to such date the Participant has withdrawn from the Offering
Period as provided in Section 10 hereof.


 


20.           Amendment or Termination.


 


(a)           The Administrator, in its sole
discretion, may amend, suspend, or terminate the Plan, or any part thereof, at
any time and for any reason.  If the Plan
is terminated, the Administrator, in its discretion, may elect to terminate all
outstanding Offering Periods either immediately or upon completion of the
purchase of shares of Common Stock on the next Exercise Date (which may be
sooner than originally scheduled, if determined by the Administrator in its
discretion), or may elect to permit Offering Periods to expire in accordance
with their terms (and subject to any adjustment pursuant to Section 19).  If the Offering Periods are terminated prior
to expiration, all amounts then credited to Participants’ accounts that have not been used to
purchase shares of Common Stock will be returned to the Participants (without
interest thereon, except as otherwise required under local laws, as further set
forth in Section 12 hereof) as soon as administratively practicable.


 


(b)           Without stockholder consent and
without limiting Section 20(a), the Administrator will be entitled to
change the Offering Periods, limit the frequency and/or number of changes in
the amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a Participant in
order to adjust for delays or mistakes in the Company’s processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the


 


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purchase of Common Stock for
each Participant properly correspond with amounts withheld from the Participant’s
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable that are consistent
with the Plan.


 


(c)           In the event the Administrator
determines that the ongoing operation of the Plan may result in unfavorable financial
accounting consequences, the Administrator may, in its discretion and, to the
extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:


 


(i)    amending the Plan to conform with the safe
harbor definition under Statement of Financial Accounting Standards 123(R),
including with respect to an Offering Period underway at the time;


 


(ii)   altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;


 


(iii)  shortening any Offering Period by setting a
New Exercise Date, including an Offering Period underway at the time of the Administrator action;


 


(iv)  reducing the maximum percentage of Compensation
a Participant may elect to set aside as payroll deductions; and


 


(v)   reducing the maximum number of Shares a
Participant may purchase during any Offering Period or Purchase Period.


 


Such
modifications or amendments will not require stockholder approval or the
consent of any Plan Participants.


 


21.           Notices.  All notices or other communications by a
Participant to the Company under or in connection with the Plan will be deemed
to have been duly given when received in the form and manner specified by the Company
at the location, or by the person, designated by the Company for the receipt
thereof.


 


22.           Conditions Upon Issuance of Shares.  Shares of Common Stock will not be issued
with respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto will comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and will be further subject to the
approval of counsel for the Company with respect to such compliance.


 


As
a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.


 


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23.           Code Section 409A.  The Code Section 423 Plan Component is
exempt from the application of Code Section 409A.  The Non-423 Plan Component is intended to be
exempt from Code Section 409A under the short-term deferral exception and
any ambiguities in the Plan shall be construed and interpreted in accordance
with such intent.  In furtherance of the
foregoing and notwithstanding any provision in the Plan to the contrary, if the
Administrator determines that an option granted under the Plan may be subject
to Code Section 409A or that any provision in the Plan would cause an
option under the Plan to be subject to Code Section 409A, the
Administrator may amend the terms of the Plan and/or of an outstanding option
granted under the Plan, or take such other action the Administrator determines
is necessary or appropriate, in each case, without the Participant’s consent,
to exempt any outstanding option or future option that may be granted under the
Plan from or to allow any such options to comply with Code Section 409A,
but only to the extent any such amendments or action by the Administrator would
not violate Code Section 409A. 
Notwithstanding the foregoing, the Company shall have no liability to a
Participant or any other party if the option to purchase Common Stock under the
Plan that is intended to be exempt from or compliant with Code Section 409A
is not so exempt or compliant or for any action taken by the Administrator with
respect thereto.  The Company makes no
representation that the option to purchase Common Stock under the Plan is
compliant with Code Section 409A.


 


24.           Stockholder Approval.  The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan
is adopted by the Board.  Such
stockholder approval will be obtained in the manner and to the degree required
under Applicable Laws.


 


25.           Governing Law. The Plan shall
be governed by, and construed in accordance with, the laws of the State of
California (except its choice-of-law provisions).


 


26.           Severability.  If any provision of the Plan is or becomes or
is deemed to be invalid, illegal, or unenforceable for any reason in any
jurisdiction or as to any Participant, such invalidity, illegality or
unenforceability shall not affect the remaining parts of the Plan, and the Plan
shall be construed and enforced as to such jurisdiction or Participant as if the
invalid, illegal or unenforceable provision had not been included.


 


27.           Automatic Transfer to Low Price
Offering Period.  To the extent
permitted by Applicable Laws, if the Fair Market Value of the Common Stock on
any Exercise Date in an Offering Period is lower than the Fair Market Value of
the Common Stock on the Enrollment Date of such Offering Period, then all
participants in such Offering Period will be automatically withdrawn from such
Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period
as of the first day thereof.


 


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